Source: Bloomberg
Molly Smith
Although the remarks about the cooling of the United States are endless, the prices have not declined in terms of personal feelings.This is because most items have not become cheap.
Inflation is presented in a way of change.Indeed, prices are actually growing at a slower speed -that is, inflation is slowing.But for ordinary Americans, their personal experience is that everything is more expensive than in the past, and the situation will not change before there is a comprehensive currency tightening.
The consumer price index reflects the overall inflation rate, while another report on the average price data released by the US Labor Statistics (BLS) reflects the amount of the Americans's actual payment.It mainly covers food and beverage categories, while CPI shows the inflation rate of various commodities and services in the entire economy.
BLS price data shows that the average price of basic items such as beef and potato chips is higher than the level before the crown disease.The price of gasoline has risen again, and the cost of electricity costs and other daily necessities is still very high.
The latest CPI data scheduled to be released on Thursday is expected to show that consumer prices increased by 3.3%year -on -year in July, slightly higher than last month, but still nearly two years of the minimum growth rate.The inflation rate reached a peak of 9.1%in June last year, the highest in 40 years.
CPI data shows that the price of groceries has fallen in the past four months, but after two consecutive years of up, this has almost not sufficient to have a significant impact.Since the coronary disease in February 2020, domestic food costs have risen more than 23%.
The problem is that wage growth basically does not drive side by side.Salary growth has just begun to surpass inflation in recent months, but before that, Americans have actually experienced a decline in purchasing power for two consecutive years.
"People complained that everything is too expensive when people go to a grocery store. I am one of them," Jennifer Lee, a senior economist of BMO Capital Markets, said, "You are willing to buy it just because you have to eat."
This explains to a large extent why Americans are quite frustrated with their financial conditions, which also drags the index of confidence.The University of Michigan's consumer confidence index was 101 in February 2020, and when inflation reached the peak in June 2022, the confidence index fell to half of the level, a record low.
Since then, the index has rebounded to 71.6, but it is still far below the longer -term average.
Inflation has also been a problem that continues to face during the term of Biden.According to Gallop's data, since the rise in price pressure, the support rate has been less than 50%in the past two years.Although his economic policy may help the US economy avoid falling into recession, the federal budget deficit is expanding.
AGF Investments Inc. Chief US policy strategist Greg Valliere told Bloomberg TV on Monday, "American voters are still afraid of inflation. The slowdown of inflation cannot eliminate the sacrifice made by Americans to adapt to higher living costs.They mainly depend on the reduction of credit cards and savings, which has also pushed up the breach of contract.
Sure enough, if the labor market continues to be strong, the pain will be more serious.Employers continue to increase employment at a stable rate, and the unemployment rate is still close to the minimum level in the past decades, which makes consumers have the ability to continue spending.
